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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Pakistan Army's Behind-the-Scenes Role in CPEC Success

In July 2016, British newspaper Financial Times report headlined "China urges Pakistan to give army lead role in Silk Road project (CPEC): Squabbles in Islamabad highlight obstacles to Beijing’s plans for transport and energy corridor" said as follows:

"Frustrated with the slow progress on a sprawling, $46bn infrastructure project stretching from China to south Asia, Beijing is seeking to give Pakistan’s army a lead role.... progress has stalled as the two sides work out how to turn the proposals into concrete projects, said Victor Gao, a former Chinese foreign ministry official, with some blaming Pakistan’s competing ministries"..... “Pakistani politicians have squabbled over the route for the CPEC and this may have made people nervous in Beijing,” said a Pakistan government official. “Pakistan is a noisy place politically while the Chinese are not used to harsh disagreements, especially over such a vital project.”

In the first week of November 2016, hundreds of containers arrived at Pakistan's Gwadar Port from Western China via CPEC's western land route. These containers were loaded onto "Cosco Wellington", a large Chinese vessel, and the ship departed Gwadar Port on November 13, 2016, for various destinations in Africa, Middle East and Europe.

So what is happening behind the scenes? Is the Pakistani military playing a big role in making CPEC a reality? What is the extent of Pakistan Army's participation in executing CPEC-related projects? Let's examine answers to these questions in three parts: Managing squabbling civilians, providing security and projects execution.Squabbling Civilians:

Pakistan Army Chief General Raheel Sharif is playing a very active behind-the-scenes role in managing the infighting among politicians, ministers and the civil servants. It has been reported that Gen Sharif has been talking to all of the stakeholders regularly to ensure progress on China-Pakistan Economic Corridor projects.

Providing Security:

Various militant groups, including Indian government proxies, are engaged in sabotaging CPEC. While some attacks have been successful, it is believed that the Pakistani military has been able to prevent many more. Thousands of soldiers and hundreds of intelligence officers are believed to be working to manage the security situation all along the western route and in Gwadar. This is what made the recent pilot run with the trucks convoy reaching Gwadar and operationalizing the port recently.

Projects Execution:

The Pakistan military has thousands of civil, mechanical and electrical engineers with decades of experience in building large infrastructure projects and analysts say the army is well placed to supervise the corridor, according to the Financial Times.

In fact, Pakistan Army's Frontier Works Organization (FWO) is building significant parts of the China-Pakistan Economic Corridor (CPEC). A July 2015 announcement is an illustration of what Frontier Works Organization is doing to advance CPEC:

“The Frontier Works Organization (FWO) has built roads with 502 kilometers length on the western alignment of China Pakistan Economic Corridor (CPEC) to link Gwadar with other parts of the country. The FWO took up the challenge to extend the benefits of Gwadar port to rest of the country by building roads in rugged mountainous terrain and highly inaccessible areas. The gigantic task was undertaken on the directives of Chief of Army Staff General Raheel Sharif."

Army's Strong Commitment:

Army Chief General Raheel Sharif has made his institution's commitment loud and clear by frequent statements on the subject. He has said “We will do everything to make it a success". He is also record as warning that “terrorism is a global issue and warrants global response. The funding of all terrorist organizations has to be checked by all. We are against use of proxies and won’t allow it on our soil".

Summary:

Pakistan Army is playing a crucial role in ensuring progress and completion of China Pakistan Economic Corridor (CPEC) related projects. The army leadership is using all its power and influence with all stakeholders, including politicians and civil servants, as part of this campaign to bring about development of infrastructure and energy to make Pakistan economically successful.

General Raheel Sharif, Chief of Army Staff on Sunday inaugurated an important section of upcoming Central Trade Corridor (CTC) alongwith the largest bridge on this road in South Waziristan Agency. CTC is a strategic road link to facilitate trade not only between Pakistan and Afghanistan but it will also directly and indirectly help revive local economy of FATA and KP. An international standard, 705 KM long road network through southern KP & FATA, CTC is being built by Army Engineers and funded by friendly countries.

The 76 KM long Shakai – Makeen road funded through USAID is an important lateral along the CTC which connects the two main axes of Trade Corridor i.e., Road Bannu – Miranshah – Ghulam Khan and Road Wana – Aangor Ada. Apart from other economic, security and strategic advantages, the newly constructed roads have reduced travelling times considerably.

The COAS said, development of FATA is a priority task being undertaken by the Army as a well considered strategy. Pakistan Army has undertaken 178 x projects so far in social sector take communication infrastructure and power sector in FATA and Malakand areas. These projects are aimed to improve the quality of life in tribal areas and address the problem of militancy on long term basis.

While addressing the tribal elders, COAS appreciated their support in combating terrorism and acknowledged their sacrifices in war against terrorism. He reiterated Army’s resolve to bring peace and stability to the affected areas.

Referring to operation Zarb-e-azb the Gen. Raheel Sharif said that the operation is progressing successfully as per plan. He said while focusing on early completion, the army will continue with rehabilitation and reconstruction activities. A comprehensive plan in this regard has been chalked out in consultation with the government.

Haroon Akhtar, special assistant to the Prime Minister on revenue said on Wednesday the country, beset by low tax-to-GDP ratio, is expected to achieve growth rate of six percent before the next elections, due to introduction of pro-business policies.

“The business-friendly policies of the government have resulted in rapid economic development and the country will achieve growth rate of six percent by the elections (due 2018),” Akhtar told business leaders at the newly-constructed building of the Federation of Pakistan Chambers of Commerce and Industry in Islamabad.

“Low tax-to-GDP ratio is hampering development for which we are trying best, while enhanced transparency has been ensured in the FBR (Federal Board of Revenue).”

During the recent years, the country has seen its growth accelerate on support of a three-year bailout program by the International Monetary Fund. Still the government is struggling to increase narrow tax base, shrinking exports and key foreign direct investments.

The FBR collected Rs3,112 billion in taxes for the fiscal year ending June 30, 2016, registering a 20 percent increase over the previous fiscal.

Yet, the country’s tax-to-GDP ratio has stagnated at 10 percent over the last few years. A study said only tax evasion shears five percent from the tax-to-GDP ratio.

The government eyed growth rates at 5.7 percent for the current fiscal year of 2016/17 and seven percent for 2017/18.

Pakistan’s economy achieved growth rate of 4.7 percent in 2015/16, the highest in the past eight years.

The World Bank, however, projected the country’s growth rate at 5.4 percent by 2018. Akhtar said a lot of incidents of tax evasion are being reported, “but, we opt for legal actions in a very few cases.”

“Those who pay tax after detection face no action at all,” he added. “US is a super power because of a good tax system, while Europe is considered developed due to good taxation, therefore Pakistani business community should also discharge obligation so that Pakistan can develop at a fast pace.”

He said a number of sectors, including fertiliser, have been given tax breaks, which has resulted in good growth. “Lenders like Asian Development Bank is ready to provide loan on less than two percent, which indicates its confidence on Pakistan’s policies,” he said.

The PM’s assistant said the government has not transferred burden of improved oil prices to the masses. He said those who say that foreign debt would swell to $110 billion have overlooked certain facts. “GDP, investment and exports will also take a boost,” he added. “Debt-to-GDP ratio in Pakistan is at a comfortable level of 20 percent, while average interest payable on debt is three percent, which is not worrying.”

#CPEC: Will #India Start War With #Pakistan And #China Over It? http://www.valuewalk.com/2016/11/cpec-india-vs-pakistan-china/ … via @ValueWalk

By Polina Tikhonova

With China and Pakistan actively working on the CPEC, the uptick of irresponsible propaganda pieces coming from politicians and analysts – originating mostly from India – shows no sign of going away.

Such an opinion was expressed by Panos Mourdoukoutas, a contributor for Forbes. Mourdoukoutas argues that China has to either appease India or “forget” about the CPEC project.

A number of Indian government officials have expressed their concerns over the CPEC since the project was announced over three years ago. And while India, as alleged by Pakistan, has made numerous attempts to disrupt the project, the chances that India might actually start a war with China and Pakistan over the project remain equal to zero.

In fact, former Indian Ambassador Melkulangara Bhadrakumar said India would “lose heavily” if it remained opposed and isolated from the CPEC.

However, numerous Indian government officials believe the CPEC is designed to undermine India’s position in the region and see the project as a threat to India’s interests.

While that creates tensions between China and Pakistan on one side, and India on the other, authors of anti-CPEC propaganda pieces seem unable to provide at least one legitimate reason as to why India would go to war with China and Pakistan over the project.

China would protect the CPEC at all costs as the project is worth a whopping $46 billion and is a game-changer for both China and Pakistan. Disrupting the project would mean a direct declaration of war to China and Pakistan. And India knows it.

This past summer, the China Institutes of Contemporary International Relations suggested that Beijing will have “to get involved” if New Delhi attempts to disrupt the project.

---------

In his piece arguing that China is lagging behind India in terms of investments, Mourdoukoutas provides data that suggests India’s economic growth is set to outpace China.

Although India currently enjoys the rise of its economy, the country is becoming less attractive for investors in the long run. The reason? India is a “highly crowded trade,” as said by Herald van der Linde, head of Asia Pacific equity strategy at HSBC, in the bank’s Asia Equity Insights Quarterly.

In his article, Mourdoukoutas also suggests that “if pro-Indian forces in Pakistan sabotage China’s CPEC route,” China should expect an open confrontation against India.

Mourdoukoutas also argues that it’s the reason why Beijing “should either appease New Delhi or forget about CPEC altogether.”

An open military confrontation between the world’s two most populous countries is very unlikely, especially considering the fact that India has already made several large-scale attempts to sabotage the CPEC.

Earlier this year, Pakistan alleged it had arrested a spy from India’s RAW, Kulbhushan Yadav. Islamabad believes that Yadav is responsible for hindering implementation of CPEC projects in Pakistan’s Balochistan province.

Pakistan recor-ded a substantial decrease in terrorist activities last year, with 45 per cent fewer attacks and 38pc fewer deaths reported in the year than in the previous year, according to the report of the ‘Global Terrorism Index (GTI) 2016’.

This is the second consecutive year in which Pakistan has seen reduction in terrorist activities. Terrorism in the country is now at its lowest level since 2006, says the report released by the US-based Institute for Economics and Peace, an independent think-tank.

The GTI is based on data from the Global Terrorism Database which is collected and collated by the National Consortium for the Study of Terrorism and Responses to Terrorism, a department of the Homeland Security Centre of Excellence led by the University of Maryland.

Pakistan had the third largest decline in deaths. There were 677 fewer deaths in Pakistan. As a result, Pakistan had the lowest number of deaths from terrorism since 2008, said the report released on Thursday.

The reduction in deaths from terrorism is in part explained by Zarb-i-Azb military operation being carried out by Pakistan Army. The operation focused on removing militant safe havens in North Waziristan.

Pakistan continued to see decline in its levels of terrorism due to infighting within the largest active group, the Tehreek-i-Taliban Pakistan (TTP), as well as to the operations of the army in the Federally Administered Tribal Areas.

Although the TTP reduced the number of attacks in Pakistan, it was still responsible for the most attacks, according to the report. In 2015 the group was responsible for 36pc of the deaths, totalling 240 people. This was down from 59pc of the deaths, totalling 544, in 2014, representing a sharp year-on-year reduction.

Although the number of attacks declined, terrorist activities was spreading across the country. It moved from the border region with Afghanistan to many other parts of the country, especially the Punjab province in the east which is the most populated area of Pakistan. A total of 429 cities experienced terrorist attacks in 2015, up from 17 in 2000. This may create a much more difficult situation for the Pakistani government in the coming years.

#Gwadar port a watershed in #China and #Pakistan ties- #CPEChttp://www.khaleejtimes.com/international/pakistan/gwadar-port-a-watershed-in-china-and-pakistan-ties

China and Pakistan have sailed into the Arabian Sea and are waiting to shake hands with the UAE and the rest of the world across the Straits of Hormuz. Making marine shipping and political history, two ships sailed from the new Pakistani port of Gwadar into the Arabian Sea.

China and Pakistan are tapping the most important energy-rich markets in the world - the UAE, Saudi Arabia and Africa - with two ships - MV Cosco Willington and MV Al Hussein - sailing into the Arabian Sea from the new Pakistani port of Gwadar, destined for the Middle East and African ports. The occasion is a watershed moment.

It also marked the opening of the first segment of the $51 billion China-Pakistan Economic Corridor (CPEC). Gwadar and the CPEC are the lynchpins of making this region a big economic zone. It will cover the whole of China, Central Asian Republics, Afghanistan and Pakistan in the east, UAE and Saudi Arabia in the South, Iran in the west and Turkey-EU in the northwest.

The CPEC reduces the sea route from Shanghai to the UAE to a few kilometers. Eyeing the massive business opportunities, Saudi Arabia, Iran and Turkey have offered to join the CPEC zone. Turkish President Recep Tayyip Erdogan was in Islamabad to take the deal forward.

The western Chinese city of Kashgar won the distinction of being the first to use the pilot project in the new land-sea route.

Geo-strategic locationPakistan Prime Minister Nawaz Sharif said the CPEC, of which Gwadar is the southern-most terminal, has become a reality with the start of shipment of trade cargo from this new port.

"The CPEC project enjoys a unique geo-strategic location, standing at the crossroads of three major engines of growth, including South Asia, China and Central Asia. It will change the fate of three billion people in the region. It will also serve as the hub of a major trade zone," he said.

Pakistan has already allocated land for the Gwadar free trade zone, with special tax and tariff concessions. The exclusive industrial park, processing zone and mineral economic zone are being implemented on a fast-track basis.

Sharif described the Gwadar-CPEC project and arrival of the Chinese cargo-container convoy as "break of a new dawn" and "a watershed event."

Sharif said: "I applaud the role of Chinese President Xi's [Jinping] vision of regional prosperity which coincides with Pakistan's vision of Deevelopment-2020. President Xi's vision of shared prosperity through greater connectivity is the need of the hour in a conflict-ridden and polarised world."

President Jinping said: "Our concept of 'one-belt, one-road' aims at integrating trade and commercial activities of regional countries through enhanced connectivity. It will transform Pakistan into a major hub of trade." The message was read out at the inauguration of Gwadar port by Ambassador Sun Weidong.

The ambassador said it is for the first time that a trade cargo has successfully passed through from the north of China to the south of Pakistan and onto the Arabian Sea.

"This is also for the first time that China and Pakistan have co-organised a trade convoy through Pakistan to Gwadar port. The local people will get jobs. It proves that connectivity of local roads will be beneficial to all."

The project officials said that 125 Chinese cargo trucks had entered Pakistan through the border post of Sust. They also said an air link between the Chinese city of Kashgar and Pakistani city of Skardu will be established. Yet another air link will connect the Chinese city of Urumqi with the Pakistani city of Gilgit to facilitate trade of Chinese goods through Gwadar.

Federal government is planning on establishing about 29 Special Economic Zones (SEZs) in all of the four provinces under China-Pakistan Economic Corridor.

SEZs will be capable of enhancing country’s economic capacity, expanding the exports and providing much-needed momentum to the country’s economy. They’ll prove to be a turning point in the industrial development and infrastructure also. Pakistan has always been lagging behind the other South Asian countries in utilizing the SEZs benefits.

What are SEZs?

The idea of SEZ first started in New York in 1937. As per SEZ Act of Pakistan,

“Special Economic Zone (SEZ) is a blanket term for various types of specialized zones with specific types of enterprises operating in a well-defined geographic area where certain economic activities are promoted by a set of policy measures that are not generally applicable to the rest of the country. Successful SEZs offer immediate access to high-quality infrastructure, uninterruptible power supply, clearly titled land, public facilities, and support services.

The fiscal benefits under the SEZ law include a one-time exemption from custom duties and taxes for all capital goods imported into Pakistan for the development, operations and maintenance of a SEZ (both for the developer as well as for the zone enterprise) and exemption from all taxes on income for a period of ten years.”

As per 18th Amendment, provinces can now independently formulate their investment and trade policies. SEZs will be a source of their collaboration in designing lucid policies.

The challenge to be faced by SEZs will be in selection of the area. Government should select remote locations so that other locations are not over crowded. They should design a unique incentive structure to attract potential investors. They should also provide residential facilities near economic zones.

Already established industries in Pakistan like textile, cement, household appliances, surgical equipment, mineral resources etc., will be the potential candidates for such SEZs.

This will be a huge step for Pakistan if properly implemented. Considering that China is also in the phase of upgrading its industrial base, CPEC may face some issues in obtaining the necessary material. The adequate coordination between two countries and the provincial and federal governments of Pakistan and designing an appropriate incentive structure are the necessary conditions for the success of SEZs under CPEC.

The pursuit of a tit-for-tat diplomacy will not get India anywhere because Balochistan and Kashmir are not on a par, legally and politically. The time has come for India to drop the Baloch card and work for the settlement of Kashmir. By A.G. NOORANI“PAKISTAN’s vulnerabilities are many times higher than us [sic]. Once they know that India has shifted gear from defensive mode to defensive-offence, they will find that it is unaffordable for them. You may do one Mumbai, you may lose Balochistan,” Ajit Doval, now Prime Minister Narendra Modi’s National Security Adviser, said at the 10th Nani Palkhivala Memorial Lecture at Sastra University, Thanjavur, on February 21, 2014. This was three months before he became NSA and the Manmohan Singh government was still in power.

The shock this Doval Doctrine of “defensive-offence” induced precluded any cool analysis of its implications (see the writer’s “The Doval doctrine”, Frontline, November 13, 2015). Doval was advocating a diplomacy of tit for tat with full knowledge of the perils it entailed, not least among them being the risk of matters getting out of hand in the retaliatory ladder of escalation. This becomes apparent when one moves from the doctrine to the specific, Balochistan.

Whoever perpetrated the Mumbai attacks committed a dastardly crime. But at no time did India ever allege that Pakistan’s top leaders were complicit in it. Is it not a wholly disproportionate retaliation to secure the detachment of one of Pakistan’s four provinces? Would its leaders, civil and military, sit back with folded hands when this is being attempted? And the Great Powers in the “Security Council”, especially China, which now has a stake in Balolchistan? And, pray, how does Doval propose to detach Balochistan? By military invasion? Far from it. Our “intelligence commando” has other plans whose elements are no secret. He proposes to do this by fomenting subversion through covert action. He could not possibly have made the claim (“you may lose Balochistan”) unless India had acquired significant “assets” there—as they are called in the idiom of covert operations—over the years. They cannot be acquired instantly. It is these existing assets, acquired, trained and funded over the years, which emboldened Doval to speak as confidently as he did.

The Pakistan Navy (PN) has set up a new maritime force known as Task Force-88 (TF-88) to protect sea lanes linked to the China-Pakistan Economic Corridor (CPEC), which is expected to trigger a surge in maritime activity at the country's Gwadar Port on the Arabian Sea.

The new task force, which will reportedly comprise naval vessels, manned and unmanned aircraft, and other surveillance assets, was established on 13 December "for [the] maritime security of Gwadar Port and [the] protection of associated sea lanes against both conventional and non-traditional threats", according to a DAWN newspaper report.

Marines are also set to be deployed at sea and around the port to enhance security, a senior PN official was quoted by the paper as saying.

More than 10,000 Chinese workers are now building at least 10 partly Beijing-financed energy projects across Pakistan that are set to grow the country’s energy output by 60% within two years in the first major boost to supply in two decades.Mr. Sharif’s government plans to inaugurate a nuclear plant this month and a pipeline network in January that will carry large-scale gas imports upcountry.

“Never in the history of Pakistan has there been such a big package of electricity plants in the pipeline,” said Syed Akhtar Ali, in charge of energy at the Planning Commission, the ministry tasked with long-term development.

Mr. Sharif’s promise to solve the electricity crisis propelled him to office at a time when the energy deficit was knocking some 2 percentage points off growth, economists say, stifling industry and leaving school children to study by candlelight.

Pakistan’s economic growth has risen to almost 5% annually under Mr. Sharif’ and his government set a 7% target for the years ahead. That, his government hopes, will boost the moribund private sector, reduce unemployment and provide youth with more alternatives to extremism.

The energy plan is a centerpiece of that economic aspiration. Mr. Sharif is racing to fulfill his pledge and become the first incumbent to be re-elected in a country whose voters—or the interventionist military—have long ousted its leaders for their poor performance. Mr. Sharif, who led Pakistan twice before in the 1990s, hasn’t previously even completed a term in office.

“Electric power is going to be the swing factor in the election,” said Shahid Khaqan Abbasi, the minister for petroleum. “If we don’t deliver on power, we won’t be seen as having delivered.”

Mr. Sharif’s plan depends heavily on ​China, which​ is translating its long-term strategic ties with Pakistan into an economic partnership, part of a broader infrastructure push across Eurasia. China is financing many plants as commercial investments. But to expedite projects, the Pakistani government is funding ​some​ power stations in the run up to the election, including three gas-fired plants in Mr. Sharif’s home province of Punjab. The eventual aim is to more than double Pakistan’s current output of around 16,000 megawatts.

By comparison, Washington’s multibillion-dollar civilian aid program for Pakistan has been far less ambitious, adding 1,000 megawatts to the country’s power generation in recent years by enhancing existing power stations.

The plan is to add 10,000 megawatts of the new China-backed infrastructure, a mixture of coal, gas and hydro electricity, by early 2018, months before elections, at a cost of $21 billion. The schedule is tight. The massive amounts of natural gas and coal needed for the plants require an extensive delivery system of ports, pipelines and railways. The country also needs to upgrade its power distribution network to be able to carry the extra electricity.

“My concern is that gaps in longer term planning, including much needed structural, regulatory and market reforms, will once again fall by the wayside in the euphoria of having achieved a temporary electricity supply surplus,” said Jamil Masud, a partner at Hagler Bailly Pakistan, an energy consultancy,

---At Karachi’s Port Qasim, a $2 billion coal-fired plant is taking shape. After only 1.5 years under construction, one 400-foot high cooling tower is up and the second is almost complete. The hulking metal frames for the boilers are in place and a jetty for imported coal is taking shape. Around 4,000 people work on the site, 24 hours a day—half of them Chinese workers who aren’t allowed to step outside its boundary.

On the other side of the port, a massive tanker ship serves as a terminal for liquefied natural gas imports, which are piped across Pakistan. Three more terminals are planned by the government.

#China to set up large steel plant at #Gwadar, #Pakistan: Chinese Envoy. #CPEC http://www.app.com.pk/china-to-set-up-large-steel-factory-at-gwadar-envoy/ … via @Associate Press Of Pakistan

Acting Chinese Ambassador to Pakistan, Zhao Lijian Monday said that his country would set up a large steel factory at Gwadar to further expedite economic developments being carried out under China-Pakistan Economic Corridor (CPEC) framework.“Both China and Pakistan would very soon sign an agreement to establish the steel factory, three times bigger than the free economic zone being set up in Gwadar city,” he made this announcement while addressing participants of a day-long conference on CPEC: Potential and Prospects organized by Strategic Vision Institute (SVI) here.He said, industrial cooperation was the forth pillar of CPEC initiative and both the country would discuss it in the next meeting of Joint Cooperation Committee (JCC) of CPEC to be held in Beijing this month.“After completion of energy projects, transport infrastructure and development of Gwadar Port, industrial cooperation between China and Pakistan will be the main topic at the next JCC,” he added.Zhao Lijian informed that China was working a lot for the development of Gwadar Port which was built with the Chinese government’s assistance.He said, after completion, the port was handed over to Singapore but there was no improvement even after passage of five years.Finally, it was given to the Chinese government by Pakistan government and the port was made functional and a ship carrying Chinese goods left for Africa.He said, a business centre, hostel for different companies, fisheries processing plant with cold storage facility had been established in the free economic zone spread over around nine kilometers.About Gwadar airport up-gradation, he said, the new international airport would have landing facility for all the modern aircraft including A-380 Airbus after completion, adding, prior to the up-gradation only C-130 or propeller-planes could land at the old airport.The Acting Chinese Ambassador said, a 150-bed hospital was being built for the treatment of local people while a vocational institute had been set up for imparting training of different skills especially for the fishermen.Talking about different energy project being completed under CPEC initiative in different parts of Pakistan, he particularly mentioned about the coal-based power plants which were being built in accordance with environmental standard set by the World Bank (WB) and other concerned international organizations.He said, China produces around 60 percent of its total power generation through coal based power stations using modern and state of the art technology.“The environmental concerns will be taken into consideration during the completion of these power stations,” he added.Zhao Lijian pointed out hydro power plant, coal based power plants, wind power plants and solar based power plants were being set up to meet the electricity shortage in Pakistan.He informed that the Karot Power Plant was being financed by the Silk Bank established by the Chinese government.The groundbraking of Suki Kinari, Kohala Hydro Power Project would be held early next year, he said and added, Sahiwal Power Plant and Port Qasim Power Plant would be completed by next June and December respectively.He said, a power plant set up at Thar coal site would also be inaugurated in next June.He said, HUBCO power plant, one of the biggest coal-based power plant, would provide constant and stable power supply throughout the year.

#China to set up large steel plant at #Gwadar, #Pakistan: Chinese Envoy. #CPEC http://www.app.com.pk/china-to-set-up-large-steel-factory-at-gwadar-envoy/ … via @Associate Press Of Pakistan

The Acting Chinese Ambassador said, the 50MW wind power plants and the 100-MW solar power plant set up at Balochistan would boost the power production and hoped there would be no loadshedding in Pakistan after completion of all energy projects.Giving overview of transport infrastructure projects, he said, the Multan-Sukkur section of Peshawar-Karachi motorway would be completed at a cost of US$ 2.8 billion.He pointed out that no other country was ready to support this project because of being less populated and having less-transport.China came forward to build this project on Built-Operate-Transfer (BOT) basis in three years.He said, KKH Phase-II would be completed at a cost of US$ 1.3 billion, adding, its Phase-I had already been completed while Phase-III would soon be planned.About railways upgradation, he said, after completion of dual tracks, speed of trains could be enhanced upto 160 km per hours.Speaking on the occasion, Chairman, Parliamentary Committee on CPEC, Senator Mushahid Hussain Sayed said, the CPEC initiative would be beneficial for not only Pakistan and China but also the South Asia and regions beyond.He said, at a time when nobody was coming forward to help Pakistan, China extended support and confidence to its time-tested friend.He informed that the land route of CPEC would connect 65 countries through Pakistan’s Gwadar port.He said, China’s cooperation in energy sector, transport infrastructure development including railways upgradation, Gwadar port, development of Thar coal, Karachi-Peshawar motorway, employment to 10,000 Pakistanis and early harvest projects under CPEC had given a new impetus to economic growth.“These projects have not only pushed Pakistan economic revival but also help integrate different parts of our country,” he added.Mushahid opined that importance of Shanghai Cooperation Organization (SCO) had increased manifold for regional cooperation and after India’s stubborn attitude regarding South Asian Association of Regional Cooperation (SAARC).In his welcome address, President, SVI, Dr. Zafar Iqbal Cheema said that the CPEC was not only a game changer for South Asia but also for Central Asia and regions beyond.He said, CPEC would have global implications over the time, adding, it would promote trade and economic activities in the entire region.

Dr Jean-Francois Di Meglio, President of #Asia Centre in #France: "#CPEC is a game-changer for #Pakistan". #Chinahttps://www.dawn.com/news/1303725/cpec-is-a-game-changer-for-pakistan

KARACHI: China may have more core benefits from the China Pakistan Economic Corridor (CPEC) but it’s a game-changer for Pakistan which will also benefit from it. Contrary to what some Europeans think, Pakistan has a strategic position in the region.

This was one of the main points raised by Dr Jean-Francois Di Meglio in his lecture on ‘The Economic, Strategic and Environmental Consequences of the New Silk Roads’ at the Area Study Centre for Europe (ASCE), University of Karachi, on Wednesday.

Dr Di Meglio, who is President, Asia Centre, France, said he was not an expert on CPEC so what he would talk about was based on his experiences. He said his talk was divided in two parts: Europe’s standpoint on the Silk Road project and China’s point of view.

Regarding the first part, Dr Di Meglio said when China announced the project in 2013, Europeans were doubtful about it. They thought since it was a 35-year project nothing could be achieved in the short term. They also thought that China was trying to rejuvenate something that used to exist in the past and there was no point doing it. Some people, however, harboured the notion that it was part of a grand plan. It was innovative because earlier the flow [of goods] was from West to East and now China was trying to reverse the direction of history.

Shedding light on what Silk Road used to be, Dr Di Meglio said in the late 20th century it was just a road but also entailed some key points and strategic places, one of which was the area crossing the border between Pakistan and Afghanistan. In modern history, he said, two significant events took place. The first was the Great Game between Russia and Britain at the end of the 19th century where Russia had accumulated wealth and wanted access to the sea; the other was the Afghanistan War that resulted in the disintegration of the USSR.

Dr Di Meglio said it was complicated for Europeans to talk about CPEC but countries like Germany and France had shown interest in it. With regard to negative feedback, some Central Asian countries were of the view that Russia was trying to re-establish links with China and the risk was that “China would be too much present”. But the Europeans discarded many important factors, he said.

On the Chinese approach to the situation Dr Di Meglio said [economic] reforms in China started in 1978 and after 35 years, in 2013, they came up with another project. If you looked at the dates, another 35 years added to 2013 would mean the arrival of the year 2048. In 2047 Hong Kong would come back to Chinese sovereignty fully; and 2049 would be the 100th anniversary of the People’s Republic of China. He said reforms brought in 1978 came through a simple process: enrichment. If the people were richer they would be easier to manage. The Silk Road had the potential of making some countries marginally richer. That could be done by building infrastructure and by linking them up with China.

Dr Di Meglio said CPEC was not an easy project but was not the most difficult to achieve either. There was room for Pakistani companies and politicians to take the initiative and speak to the Chinese for a level playing field as much as possible. Whosoever was going to benefit more from it, it was a game-changer for Pakistan. He argued that let’s say Pakistan was only benefiting 10 per cent from the project; even then you had other benefits like “influence” and “footprint”. He said some Europeans thought that Pakistan existed because there was a partition in 1947; they did not realise that Pakistan had an important strategic position.

On China’s ambitions, Dr Di Meglio said while it wanted prosperity and stability, it did not want domination in the region. China knew that in the past empires rose and fell. “The way to last long is not to dominate other countries but to play with them.”

#Pakistan Opens New 340MW Nuclear Power Plant Built With #China's Help. #CPEC

http://www.voanews.com/a/pakistan-nuclear-reactor/3653908.html

Pakistan Prime Minister Nawaz Sharif has inaugurated a nuclear power facility built with the assistance of China.

The plant at Chashma, in Pakistan's Punjab province, adds 340 megawatts to the national grid. Beijing has already constructed two other nuclear reactors, with a combined capacity of more than 600 megawatts.

The three power plants at Chashma are known as C-1, C-2 and C-3 respectively. They are are part of broader plans to overcome long-running crippling power shortages in Pakistan.

“The next (nuclear) power projectwith an installed capacity of 340 megawatts, C-4, is also being built here (in Chashma with Chinese assistance). God willing, it will be operational and connected to the national grid in April, 2017,” Sharif told Wednesday’s ceremony.

Pakistan’s current electricity output stands at around 16,000 megawatts, including nuclear power production.

The government plans to increase the power production by about 60 percent, mainly through Chinese-funded coal, gas and hydro-electricity projects under construction to try to boost Sharif’s re-election bid in next polls due in early 2018.

When Sharif took office in 2013Pakistanis were facingcompulsory power outages for up to 12 hours a day, crippling daily life and plunging businesses into darkness.

The prime minister in his speech Wednesday reiterated his election promise to resolve the crisis by the next elections.

Officials say that Chinese experts and engineers had been running the newly-built C-3 plant “on a trial basis” for three months until they formally handed over its control to their Pakistani counterparts Wednesday.

Beijing is also helping Islamabad construct two nuclear power plants in the southern port city of Karachi at a cost of around $10 billion. The projects, with a combined capacity of around 2,200 megawatts, are scheduled to be completed by 2021.

Under the agreement, China will also provide enriched uranium for fuel.

The Pakistan Atomic Energy Commission (PAEC) envisages a nuclear power production of around 8,800 megawatts by 2030.

Pakistan built its first nuclear power plant of 137 megawatts at Karachi in 1972 and it is still in operation, though at a much reduced capacity.

China is the only country helping Pakistan build nuclear power plants because Western nations have put a moratorium on the supply of these facilities citing Islamabad’s nuclear weapons program.

Under a multi-billion dollar cooperation agreement, Beijing is also helping Pakistan construct a network of roads, rails, communication and power projects to boostties between the two traditionally close allies.

The bilateral cooperation under the China-Pakistan Economic Corridor (CPEC) plans to link the northwestern Xinjiang region to Pakistani deep-water port of Gwadar Gwadar in the Arabian Sea, providing Beijing the shortest possible access for its imports and exports to international markets.

Violence has not just dropped a bit. It is down by three quarters in the last two years. The country is safer than at any point since George W. Bush launched his war on terror 15 years ago.

----The Taleban had long treasured a secure basis in Karachi, as had religious terror groups. That was a conventional crime industry specialising in kidnap, drug smuggling and extortion (every business had to pay protection money to gangs).

Pakistan’s politicians tolerated this. Pervez Musharraf, the army chief and president, was often accused of allowing the armed wing of Karachi’s largest political party, MQM, to operate with complete impunity.

This policy continued under Musharraf’s civilian successor, Asif Zardari, whose Pakistan’s People’s Party governed Karachi in coalition with MQM from 2008 to 2012. Five years ago we walked around gangster-infested Liyari town in Karachi’s port area with the local mafia don, Uzair Baloch. Baloch (now in jail) told us he could speak to Zardari whenever he wanted. The violence just rose and rose, until Zardari’s replacement Nawaz Sharif ordered his cabinet to Karachi and gave the state’s paramilitary arm, the Rangers, unlimited powers. This was the moment when political tolerance of violence ended.

We interviewed Major-General Bilal Akbar, director-general of Sindh Rangers for the past two-and-a-half years, at his HQ in the south of the city; he has since transferred to be the Pakistani army’s chief of general staff. After asking us to pass on his regards to Nick Carter, head of the British army (with whom he used to play bridge every Friday night when they were both stationed in Kabul), he explained the security situation.

In 2013 there were 2,789 killings in Karachi. In the first 11 months of 2016 there were 592. In 2013 there were 51 terrorist bomb blasts. Up to late November this year, there were two.

Three years ago, Karachi suffered from an orgy of kidnapping for ransom. There were 78 cases in 2013, rising to 110 the following year. This year, there have been 19.

[Alt-Text]Some 533 extortion cases were reported in 2013; in 2016, only 133. Sectarian killing is sharply down: while 38 members of the Shia minority (who are brutally targeted in Pakistan) were killed in 2013, that figure was down by two thirds in 2016.

Major-General Bilal told us: ‘We have apprehended 919 target killers from the militant wings of political parties since September 2013. They confessed to over 7,300 killings. The daily homicide rate in the city is less than two now. It used to be ten or 15, and during ethnic clashes we could lose 100 lives a day.’

Just three years ago, according to the Numbeo international crime index, Karachi was the sixth most dangerous city in the world. Today it stands at number 31 — and falling.

Six months after he ordered the Rangers into Karachi, Nawaz Sharif took an even more momentous decision. The prime minister, whose initial instinct had been to negotiate with the Taleban and oppose the use of force, yielded to advice from his generals. He sent the army into North Waziristan, the Taleban stronghold on the Afghan border.

North Waziristan had not just provided a base for the Taleban leadership. It was a centre for the manufacture of explosives, suicide vests and military equipment, and for training camps, as well as drawing in foreign fighters from al-Qaeda. It was the epicentre of terrorism in Pakistan, which is why this intractable and remote area had been left alone by the army for so long.

In June 2014, General Raheel Sharif (now a national hero, and no relation of prime minister Sharif) took charge of a massive military offensive, Zarb-e-Azb. Taleban groups responded with a series of atrocities of which the most grotesque was the attack on the Army Public School in Peshawar, in which a reported 140 children were killed.

Pakistan’s stock market has been on a tear in recent years. The country’s main KSE index has gained close to 400% since 2009, and 40% this year alone—leaving neighboring markets in the dust.

Pakistan’s equities have had a number of things going their way, like an improving macroeconomic environment—rising economic growth and falling inflation and interest rates. The country’s economy grew close to 6 percent in 2016, up from 4.8 percent in 2015, with inflation running around 4 percent, down from 10 percent four years ago. And the 10 year Treasury bond has yielded 8 percent, down from 12.5 percent four years ago.

Then there are a couple of overseas endorsements for Pakistan’s market reforms. Like $1 billion in support from the World Bank – and a couple of domestic acquisitions from foreign suitors, such as the acquisition of Karachi’s K-Electric by Shanghai Electric Power Co.

Another overseas endorsement was the inclusion of Pakistan’s market into MSCI’s emerging market index.

So what could kill Pakistan’s big stock market rally?

The usual suspects that haunt frontier and emerging markets: inflation, corruption, and revolution. Not always in the same order.

At least that’s the experience of South Asia and Latin American countries which have been in a similar position before.

Pakistan’s low inflation, for instance, is hard to maintain at these levels, as a poor infrastructure creates bottlenecks, which could push prices of basic commodities higher. Besides, Pakistan is heavily reliant on imported oil, which has almost doubled since last January.

Then there’s corruption and cronyism, which lead to large government budget and current account deficits, while constraining competition and technological progress. In spite of some progress in the last five years, Pakistan is still high up on Transparency International’s Corruption Index.

And revolution can only be around the corner, as the country suffers from poor enforcement of the law, sharp income inequalities, and territorial disputes with India.

Adding to these concerns over the future of Pakistan’s equities is rising US interest rates, which make investing in emerging and frontier markets less appealing than shopping around inside the US economy.

That’s why investors should be very cautious about pouring more money into Pakistan’s equities at this point.

State Grid of China will help build a 4,000 MW power transmission line in Pakistan in a project valued at $1.5 billion, Pakistan said on Friday, the latest in a series of Chinese investments in its South Asian neighbour.

The high-capacity transmission line will be the first of its kind in Pakistan and will link Matiari town in the south, near a new power station, to Lahore city in the east, a key link in transmission infrastructure, the Pakistani government said.

An agreement on the project was signed on Thursday in Beijing between Mohammad Younus Dagha, Pakistan’s secretary of water and power, and Shu Yinbiao, chairman of State Grid Corporation of China, the government said in a statement.

Construction will begin in January, and should take about 20 months, said a spokesman for the Pakistani prime minister’s office.

Pakistan has been plagued by a shortage of electricity for years, with widespread rolling blackouts in both rural and urban areas.

The government has managed to reduce load shedding – scheduled power outages – in some areas, but production gaps and distribution woes remain.

The project is the latest in a series of big Chinese investments, most of which fall under a planned $55 billion worth of projects for a China Pakistan Economic Corridor.

The corridor is a combination of power and infrastructure projects that link western China to Pakistan’s southern port of Gwadar.

Other Chinese investment in Pakistan has included the acquisition of a majority stake by Shanghai Electric of the K-Electric power production and distribution company for $1.8 billion.

Last week, a Chinese-led consortium bought a 40 percent stake of the Pakistan Stock Exchange for an estimated $85 million.

More than $35 billion of the CPEC investment will be allocated to energy projects. Once completed by the end of next year, power generation projects are likely to help Pakistan overcome its crippling power shortages, a major bottleneck for growth. This is a big reason the CPEC is welcomed by many in Pakistan's industry, who say it is going to be a "game changer" for the country.

China also recognizes that the CPEC initiative will help secure the quickest trade route connecting the country's western Xinjiang region and other landlocked areas to the Arabian Sea, which could facilitate economic development in the Chinese hinterland. The infrastructure development initiative will also allow China to mitigate the problem of overcapacity at home by exporting materials and equipment to Pakistan.

There are proposals to develop a power plant, an airport and highways and other facilities particularly around the port of Gwadar on the southwestern coast of Pakistan, which is strategically important for China as it provides the country easy access to the sea.

-----

According to a local newspaper, $700 million of the $1.1 billion spent on CPEC-related projects in the July-September period last year was financed by loans from the China Development Bank. The amount is mainly earmarked for importing materials and equipment from China, which are needed to complete the projects.

Many in Pakistan have voiced concern over the country's rising debt obligations to China. Also, Chinese companies typically bring their own engineers and workers in large numbers to do work in Pakistan.

"Surging imports from China will damage local companies," said Ehsan A. Malik, CEO of the Pakistan Business Council, which represents 62 major companies and organizations. "Tax revenue and employment will not increase." He added, "CPEC may be a Trojan horse."

However, the logic of companies participating in CPEC is very simple. "We asked China, because nobody in the world finances coal projects," said Hussain Dawood, chairman of Dawood Hercules, a large Pakistani conglomerate that includes the Engro group, which is involved in the production of energy and chemicals.

"Investment in CPEC is not only from China," said Arif Habib, CEO of the Arif Habib group. "Companies from Germany, Denmark and Saudi Arabia are also showing interest."

Despite widespread concern about the health of China's economy, Ahsan Iqbal, Pakistan's minister of planning and development, said confidently: "The CPEC projects are a high priority for Chinese companies because they can expect good returns. Even though the Chinese economy is slowing down, the companies still have huge cash reserves."

Many Japanese companies also think the best thing to do now is to take advantage of Chinese-built infrastructure in Pakistan to expand their own business. No matter who invested, if energy and infrastructure investment gains momentum, it could stimulate Pakistan's economy.

Amid all the speculation, Pakistan is moving toward its goal of becoming the next big emerging market by gradually shaking off its reputation for terrorism, corruption and political blunders.

A UN Security Council resolution has for the first time incorporated China’s Belt and Road Initiative (BRI), a multi-billion inter-continental connectivity mission that has a flagship project passing through Pakistan occupied Kashmir (PoK).

The resolution, which extends an ongoing UN assistance mission to Afghanistan, says international efforts should be strengthened to implement the BRI, President Xi Jinping’s legacy project about which he first spoke in 2013.

Beijing claims it has rounded up at least 100 countries in BRI’s support, including Pakistan, Bangladesh and Sri Lanka.

India is yet to sign up for the initiative. Foreign secretary S Jaishankar spelt it out to the Chinese government in February that India has a “sovereignty” issue with the BRI because its flagship project, the China-Pakistan Economic Corridor (CPEC), passes through PoK. According to diplomats, India endorsing the BRI would mean giving up its claims on PoK.

The UN endorsing the BRI could complicate the situation as far as India’s claims are concerned.

The resolution in question renewed the mandate of the UN Assistance Mission in Afghanistan for one year. In it, the 15-nation UN body urged to promote security and stability in Afghanistan and the region “to create a community of shared future for mankind”.

“Also included in the newly adopted council resolution was China’s Belt and Road Initiative, which aims to build a trade and infrastructure network connecting Asia with Europe and Africa along the ancient trade routes,” official news agency Xinhua reported.

The resolution “welcomes and urges further efforts to strengthen the process of regional economic cooperation, including measures to facilitate regional connectivity, trade and transit, including through regional development initiatives such as the Silk Road Economic Belt and the 21st-Century Maritime Silk Road (the Belt and Road) Initiative”.

The council resolution urged “further international efforts to strengthen regional cooperation and implement the Belt and Road Initiative”.

Besides the BRI, the resolution also mentions other projects like “regional development projects, such as the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, the Central Asia South Asia Electricity Transmission and Trade Project, the Chabahar port project agreed between Afghanistan, India and the Islamic Republic of lran”.

China has taken the inclusion of BRI in a UN resolution as a diplomatic victory of sorts.

THE CHINA-Pakistan Economic Corridor (CPEC), as it stands today, is not acceptable to India, Shivshankar Menon, a former National Security Adviser to the Government of India, said on Friday. “The sovereignty aspect of the CPEC, as proposed now, is unacceptable to us,” Menon said during a conference on The Belt and Road Initiative (BRI): India’s perspectives on China’s ambitious plan. The former diplomat’s statement comes at a time when China has made a fresh attempt at inviting India’s interest in President Xi Jinping’s pet project, the BRI, of which CPEC is a part.On March 4, Chinese diplomat Fu Ying asked India to reconsider its position on the BRI keeping in mind the “larger picture”. India has been wary of the CPEC as a part of it passes through Pakistan Occupied Kashmir. “For India, there is an added contradiction that the CPEC passes through Indian territory under Pakistani occupation,” Menon said. By making “long-term financial investment in the initiative”, he said, China seems to “solidify and legitimise that occupation”, Menon said at the conference held in Mumbai by the Observer Research Foundation.The conference was held to deliberate India’s position on the BRI ahead of China’s first international forum in May. Several economists, diplomats and mediapersons participated in panel discussions. While Menon acknowledged the economic benefits of the trans-continental initiative that connects 60 countries in Asia and Europe, he said that not all projects under the BRI were for economic justification, including the CPEC.“Not all projects under the BRI are economically viable, which suggests that there is geo-strategic motivation involved,” he said, adding that most parts of the BRI passed through some of the “most insecure” regions. Menon, however, stressed that India would be more willing to join the BRI if it were more comfortable about the security in the regions concerned and the geopolitical context within which BRI is proposed.

This was said by Frontier Works Organisation (FWO) CORE project M-9 Karachi-Hyderabad Motorway Chief Operating Officer Brigadier Tahir Siddiqui during a press conference in Nooriabad.

The organisation is the pioneer in BOT services—a service introduced by FWO with a purpose to reduce the burden on the public sector for development of large size infrastructural projects, said Tahir Siddiqui.

The Karachi-Hyderabad Motorway (M 9) is one of the BOT project achieved through competitive bidding process, added the project’s chief operating officer.

Bgdr Tahir said that the NHA has given rights of its development and subsequent operation and regulator maintenance for 25 years under a Concession Agreement to FWO-owned private limited company ‘SCORE’, which is lawfully registered in SECP observing all corporate governance regulations.

The overall construction cost of the project is Rs 37billion with details of its financing arrangement, underlying the fact that FWO injects 30% as equity share, while 70% is loaned from a consortium of local banks, which will be returned through toll revenue, This needs to be understood that the toll being collected during construction is being utilised for the construction and partially for debt servicing only, he said.

For first 10 years major chunk of toll will be used for debt repayment, and remaining will be used for operation, maintenance and management cost. After debt servicing (10 years) sizeable share will be remitted to NHA which will be utilised for other infrastructural projects, he added.

The project constitutes of an overall length of 136km out of which 120Km will be a Motorway Section and 16km will be urbanised portion. There will be eight new interchanges and latest Intelligent Transportation System (ITS) will also be provided. The project is not only limited to construction but includes operations and routine maintenance for 25 Years (till 2040) and 2 x Periodic/major maintenance, he said.

Tahir said that the project commenced in October 2015 with the construction time of 30 months (ie till April 2018). However, the FWO targets to construct the project by August 2017.The sole purpose of expediting the early completion is to reduce inconvenience to commuters during the construction phase

He further told that recently a localised failure has been observed near Loni-kot temporary toll plaza with an approximate length of 1 Lane km (0.5% of project length). These kinds of road failures are termed in engineering as ‘Rutting’ and are caused due to heavy/overloaded but slow traffic (resulting in exponential impact road). Required tests have been carried out to investigate the cause of this failure. As per the requirement, rectification of patch has already been completed.

No extra finances will be claimed from NHA or any other government institute for carrying out these rectification works, he added.

The FWO officials said that over 80,000 different types of trees of neem (Azadirachtaindica), palm (Arecaceae) and corn corpus have been planted alongside the road. Plantation work is carried out as per the elaborated horticulture plan of the M9 Project.

A drive on the newly-constructed highway connecting the port city to Ratodero reveals the trials and tribulations of building infrastructure in conflict-ridden areas

There is great buzz about the M-8 project in Balochistan — locals who use the road on a daily basis say that it has greatly reduced the time needed to travel from Gwadar to Turbat, and indeed, reduced the time for produce and supplies to be transported between cities.

And yet, great things in Balochistan tend to arrive in small, sometimes troubling packages.

A drive on the newly-constructed highway connecting the port city to Ratodero reveals the trials and tribulations of building infrastructure in conflict-ridden areas

Also known as the Gwadar-Ratodero Motorway, the M-8 falls under the purview of the National Highway Authority (NHA). In theory, it is an 893-kilometre-long “motorway” that is supposed to facilitate the movement of people and goods to and from the port city of Gwadar.

Explore: Footprints: Road trip Balochistan

The western end of this motorway is actually a junction known as the Karwat ‘zero point’, some 50 kilometres away from Gwadar. From Karwat, the road snakes through rugged terrain, first to Turbat, then to Hoshab and onwards to Khuzdar.

From Khuzdar, the highway takes a turn towards Sindh, to the town of Ratodero — the “eastern end” of the M-8. Ratodero has gained prominence in recent times for being the lynchpin of the China-Pakistan Economic Corridor (CPEC). The town is a junction where the CPEC’s western, central and eastern road routes all converge. And it is from here that trade between provinces will originate.

The M-8, therefore, is what ties the CPEC plan all together.

Late last year, the Frontier Works Organisation (FWO), who were contracted by the NHA to build the motorway, completed construction of a 200-kilometre-long strip between Gwadar and Hoshab. And although the project is yet to be formally handed over to the NHA, the road is already in use.

---

A rocky beginningTwist in the tale: the M-8 wasn’t a CPEC-specific project to begin with.

The M-8 project is also known as the Gwadar-Ratodero Motorway. The project is divided into two sections; the first from Gwadar to Khuzdar, and the second from Khuzdar to Ratodero. Work on the 200-kilometre-long Gwadar to Hoshab segment began back in 2004 under the regime of General Pervez Musharraf. This track was supposed to have been completed in 2006. It has taken 13 long years for construction to conclude.

“The M-8’s first contractor was a Chinese company named Xinjiang Beixin Road & Bridge Group Co. Ltd," explains Muhammad Musa, NHA’s project director in Kech District. “But they left the project when three Chinese engineers were killed in a car bomb blast in Gwadar during the first week of May, 2004.”

The Chinese firm had managed to complete 30 kilometres of the project, from Naleint to Talaar, during their short stint. The construction contract was then awarded to D. Baloch, but for some reason (possibly security-related), they, too, were unable to complete the work.

“The M-8 has gone through many contractors but nobody was able to work on it properly,” says Musa, “until the project was awarded to the FWO in June 2014.”

The FWO was responsible for completing all aspects of construction by October 31, 2017.

But the construction process was marred by violence ever since work started. In July 2015, for example, a press release issued by the Inter-Services Public Relations (ISPR) disclosed that six military personnel and 10 civilian employees of FWO were martyred and 29 severely injured in 136 security-related incidents. Similarly, on May 19, 2017, at least three labourers were gunned down in the Hoshab Bazaar. Despite the violence, work carried on and the highway finally saw the light of day late last year.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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